It appears that the <Exclude> tag is entirely non-functional in LM 12 LXDE. I am trying to create a custom menu and I need to exclude some files from a sub menu to prevent them from showing up in the parent menu as well.

I used the same <Exclude> directives in Peppermint Two and Arch with no problem, but it seems like it is not being parsed correctly in Mint 12. In fact, I found that I can use the <Exclude> tag interchangeably with the <Include> tag. That's right, it actually ADDS items to a given menu.

This example gives me a menu with one item in it (audacity) as expected: